Thursday, September 15, 2011

There are No Unskilled Jobs: Carpets

When I undertake to explain "competition" to law students, I make the point that definitionally, a competitive market is one where nobody makes a profit. I quote a bit of schtick I picked up years ago--I think from the Wall Street Journal--about the carpet business: the fuzzy side is always up, and 90 percent of the product is beige. Translated, there's no way to get an edge, whatever you charge somebody will always beat your price down to marginal cost.

Silly me. Reading this week's Economist obituary, I finally remembered the other basic rule: there are no unskilled jobs. Here's the account of Ray Anderson, "America's Greenest Businessman" and what he did for (and with) carpets:

[His company], he decided, would leave no print on the green-and-blue carpet of the world. By 2020 it would take nothing from the earth that could not be rapidly replenished. It would produce no greenhouse-gas emissions and no waste. That meant using renewables rather than fossil fuel; endeavouring to make carpet tiles out of carbohydrate polymers rather than petroleum; and recycling old-carpet sludge into pellets that could be used as backing.
Some of the technologies Mr Anderson hoped for (and half-envisaged, as a graduate in systems engineering from his much-loved Georgia Tech) had not been invented when he started. Several colleagues thought he had gone round the bend again. He had to bring them along slowly, in his quiet way, until they “got it” by themselves. But by 2007 the company was, he reckoned, about halfway up “Mount Sustainability”. Greenhouse-gas emissions by absolute tonnage were down 92% since 1995, water usage down 75%, and 74,000 tonnes of used carpet had been recovered from landfills. The $400m he was saving each year by making no scrap and no off-quality tiles more than paid for the R&D and the process changes. As much as 25% of the company’s new material came from “post-consumer recycling”. And he was loaded with honours and awards as the greenest businessman in America.
Most satisfying of all, sales had increased by two-thirds since his conversion, and profits had doubled. ...

He never dreamed of giving up carpet tiles. Their beauty and variety delighted him, just as Nature’s did. In his office in LaGrange they were laid out like abstract art on tables, while hanks of yarn hung on the walls. His company introduced Cool Carpet®, which had made no contribution to global warming all along the supply chain, and multicoloured FLOR for the home, “practical and pretty, too”. He was proudest, though, of Entropy®, a carpet-tile design inspired directly by the forest floor. No two tiles were alike: no two sticks, no two leaves. They could be laid and replaced quite randomly, even used in bits, eliminating waste. And when you lay down on them you might almost be in Mr Anderson’s 86-acre piece of forest near Atlanta, listening to the sparrows in the long-leaf pines, rejoicing in being a non-harming part of the web of life, like him.

Link. "No unskilled jobs," by the way, was taught me by the late Jim Sutton in the history department at the University of Louisville. A short and slender man, he could regale us with his account of his summer on the shop floor, and the number of ways a 125-pound worker can cope with the task of moving a 40-gallon vat.